It’s a pretty exciting time for us at LoanZen as we complete our first operational month having enabled multiple businesses to access invoice based financing on our platform. When we started LoanZen in September of 2015, we wanted to build a platform that would solve two key problems that we saw small businesses facing in their ability to find capital to grow their business.
- Absence of meaningful short term financing/ working capital options.
- SMB’s owner/ entrepreneur’s effort, time involved in securing credit from a bank.
A SMB (well most businesses) face the pain points of long dated client payments impacting monthly payroll, supplier payments – this leads to scarcity of working capital for day to day activities.
In our interactions with businesses, the picture that emerged for us was banks primarily catering to different intersections of 3 key requirements
- Vintage of 3 years
- Continuous profitability over that period
This unfortunately excludes a lot of younger, fast growing businesses that are either rapidly growing or have had one off impacts to their balance sheet.
A business which is growing rapidly with stable clients that does not fulfill one of the above mentioned criteria (refer diagram above) typically has to go through a rigorous time consuming process to be able to access credit. This typically leads to business owners borrowing from unorganized lending sources, which also tend to be cash based and carries its own set of risks.
We at LoanZen have built a robust and a highly analytical platform that delivers access short-term finance for small businesses with the ease & convenience of an entirely digital experience of accessing credit. As we build out to address a segment that the banks have for multiple reasons chosen to ignore, we hope to also be able to share useful tips for small business owners looking for better methods to manage their cash cycle, access to credit through our blog. Watch this space for more!